The Philippine Competition Commission and Grab Philippines have agreed on a refund mechanism that would accrue to riders each time the transport network company breaches an agreed price hike cap under a new set of commitments.
Arsenio Balisacan, PCC chairman, in a press conference said the Commission has slapped a total of P23.5 million in fines on Grab for price breaches during the first three quarters of the review under the old undertaking starting August 2018
Of the amount, P5.05 million, representing excess commission due to price breaches for the third quarter (February 10 to May 10, 2019) will be refunded to riders in the form of Grab credits within 60 days or by January 2020.
The rest is payable to the PCC.
The P23.5 million is on top of the P9 million in fines Grab had paid to PCC previously, of which P6.5 million was due to submission of inadequate data, P1 million for violation of “see destination” and P1.5 million for wrong sample frame.
Balisacan said under the extended commitment, Grab will not just refund customers but would be fined P2 million for each breach.
The first undertaking was extended on all three factors: one year on pricing and on service quality and four years on “non-exclusivity” to give a new player more time to get a foothold in the market now 99 percent dominated by Grab.
Johaness Bernabe, PCC commissioner, said under an agreed formula, Grab cannot increase its prices by an average of 22.5 percent from the rate prior to its merger with Uber in 2018, taking into account other factors like inflation, traffic and other indeces.
Balisacan said there are external factors beyond the PCC’s control that continue to impact competition in the ride-hailing market.
The regulatory environment, among others, poses as market limitations that must be addressed by other agencies including the Land Transportation Regulatory Franchising Board.
One hurdle has been resolved, ownership limits.
Bernabe said the Securities and Exchange Commission has opined that Indonesian ride-hailing firm Gojek complies with the 60:40 ownership requirement in favor of Filipinos.